SA loses R1bn a day in missed trade opportunities due to transport and logistics challenges, according to the Southern African Association of Freight Forwarders (SAAFF).
“Port delays, rail disruptions and infrastructure bottlenecks have resulted in missed trade opportunities of R1bn a day, considering the total trade per day to and from SA is more than R4bn,” SAAFF CEO Juanita Maree told Business Day on Monday.
She said the inability to efficiently handle cargo flows had led to cargo diversions and increased costs for businesses, reducing potential export volumes.
“While trade as a percentage of GDP has increased (despite the crisis), this does not indicate that logistics challenges are inconsequential. Instead, SA has lost opportunities for greater trade expansion due to inefficiencies.”
In 2023, SA recorded a total trade volume (imports and exports combined) of R4.02-trillion. In 2024, total trade declined 3.9% to R3.87-trillion, despite a positive trade balance growth of R190bn.
“Even during global challenges like trade wars, pandemics or conflicts, the link between strong logistics and economic development remains crucial,” Maree said.
She said every sector of the economy is affected by the lack of capacity.
“Supply chain disruptions have a domino effect, causing losses all the way back to production and manufacturing, also at wholesale, retail and transporter levels. Ultimately, it is the market that bears the brunt as SA’s position in world markets is eroded.”
Logistics encompasses the entire system of moving goods efficiently from one point to another. It includes the management of ports, railways, and road freight networks, all of which are essential for trade.
The logistics crisis has developed for over a decade, but the most acute and systemic decline began around 2018.
Chronic congestion and operational delays at major ports such as Durban and Cape Town, frequent disruptions to Transnet’s rail corridors and deteriorating road freight conditions have all worsened the situation. As a result, businesses face higher costs, longer transit times and cargo diversions to alternative routes or ports in neighbouring countries.
SA’s trade reputation
According to Annabel Bishop, Investec’s chief economist, a Fitch’s BMI report on SA’s logistics and freight transport highlighted the country’s competitiveness as an emerging-markets logistics hub is declining due to internal supply chain disruptions, deteriorating infrastructure and rising criminal activity on trade routes.
SAAFF’s Maree warns that persistent constraints could jeopardise SA’s strategic position as a regional trade hub.
“The risk of permanent cargo rerouting to more neighbouring alternatives such as the Port of Maputo or Walvis Bay will further erode the country’s economic potential. Without urgent reform, SA risks long-term competitiveness erosion,” she said.
However, the country faces a catch-22. With all eyes on the budget speech on Wednesday, the Treasury is maintaining a strict stance on state-owned enterprises, demanding clear progress before providing unlimited financial support.
This puts Transnet under mounting pressure, as it battles a R50bn infrastructure backlog and debt expected to soar to R151bn by 2025, following years of mismanagement and corruption linked to state capture.
“For mining, the major impact is on the bulk commodity sectors,” Minerals Council SA chief economist Hugo Pienaar told Business Day.
“These are coal, iron ore, manganese and chrome. Because of the high volumes involved, transportation of these commodities should be on rail. Given the problems at Transnet, commodity producers have been forced to use more expensive road transport [trucking] to move these commodities to the ports.”
He notes that this option is not only less environmentally friendly but also dangerous, damaging to road infrastructure, and a cause of congestion at the ports.
“In a commodity like iron ore, trucking is not feasible, meaning that in an environment where the rail service is constrained, they export less than in the past. This has resulted in production cutbacks as inventories build up at the mines,” he said.
For the citrus industry, the logistics crisis is affecting exports — especially at the Cape Town port. SA is the world's second-largest citrus exporter and the supply of all citrus, including oranges, lemons, mandarins and grapefruit, is affected.
Citrus Growers' Association (CGA) COO Paul Hardman told Business Day that their main concern was the efficiency of the container terminals and the delays caused by machine breakdowns.
“Although there were no extreme bottlenecks (in 2024), we have to stress that the 2024 season was a reprieve on the logistics front. Because of unforeseen events (extreme weather events and the high local juicing prices), the export figures were lower than expected.
“In the next few years, citrus production will increase and place much more pressure on our ports. The container terminals must be ready to handle this,” Hardman said.
While citrus export figures, like mining, have increased, Hardman believes they could do much better with proper infrastructure.
“It is completely possible — if all role players come together to expand market access and fix the ports — that we could increase exports from 165-million 15kg cartons to 260-million 15kg cartons in the next seven years. This would create 100,000 new jobs and generate billions in revenue for the fiscus,” he said.
Public-private partnerships a temporary solution
Bishop reported last month that in the first three quarters of 2024, the private sector reduced capital investment, particularly in transport equipment and residential buildings. The decline in transport equipment investment coincided with improved Transnet rail capacity and easing port congestion.
“The latest port congestion in SA is about four days on average, below that of the UK and France’s eight days, the US and India’s six days, China’s 5.5 days, and Mexico and Spain’s about four days,” she said in her note.
In his state of the nation address, President Cyril Ramaphosa said that the government released a network statement in December “which, for the first time, will enable private rail operators to access the freight rail system”.
“Open access to the rail network will allow train operating companies to increase the volume of goods transported by rail, while our network infrastructure remains state-owned,” Ramaphosa said then.
He also said that new cranes and other port equipment were being commissioned to speed up the loading and unloading of cargo and reduce waiting times for ships in ports.
According to Ramaphosa the government was “revitalising port terminals and rail corridors through the Freight Logistics Roadmap (FLR), leveraging private capital to restore them to world-class standards.”
But Maree says the FLR’s progress “is still painfully slow and performing below design capacity and well behind world standards.”
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